The coverage for windstorm stipulates the velocity of

The policy may provide that the the wind. It is provided in some policies that the wind
insurer is liable for losses caused by
the discharge of atmospheric
electricity. The said loss may be
covered even if no fire results. If fire
results, the loss as compensable
because fire is the immediate cause
A hostile fire is one that is uncontrolled, so long as lighting is not an excepted
whereas a friendly fire is one contained in its peril.
proper receptacle. Once a fire has passed
outside the limits assigned to it, it becomes
a hostile fire. So long as it is friendly, there is
not right of recovery arising under the
policy.
Liability on the part of
the insurer will ensue
only if there is a
‘hostile fire’ and not oxidation of a degree
that is sufficient to
a ‘friendly fire.’
produce a visible
flame.
1. The alteration is on the use or condition of the thing insured
2. The use or condition of the thing insured is limited in the policy The insured property must be
3. The alteration is without the consent of the insurer adequately described in the policy.
4. The alteration is within the control of the insured In construing the words used to
describe the property, the greatest
5. The alteration increases the risk
liberality is shown by the courts in
giving effect to the insurance.
must be of at least a minimum velocity of 75 miles per
The coverage for earthquake is usually
hour. Evidence of velocity is often absent, so
covered by a separate policy or
currently the peril is considered in terms of effect
extension rather than part of an existing
rather than establishing a condition. If the wind is of
coverage because it will increase the The policy may expressly warrant that the insured
such a force as to cause damage, it is deemed a
cost of policy to the point that it would property cannot be uused for storage of
windstorm and the resulting losses are covered.
not be equitable. Also, insurance against inflammable substances. The policy must clearly
earthquake normally requires special state the warranty.
terms and conditions. Thus, earthquake Even if there is prohibition regarding storage of
peril is always an exclusion from an paints and varnishes, there is no violation if it is
ordinary fire insurance policy. understood that the keeping thereof is incidental
to the business, like in a furniture business, where
retouching if the wood is needed
WINDSTORM
to preserve its condition.
LIGHTNING EARTHQUAKE In addition to the statutory
provisions regarding
TORNADO
alterations,
the insurance policy may
also include express
OTHER warranties regarding the
FIRE ALIED RISK A policy may expressly exclude war, invasion, civil commotion, or to the
use and condition of the
insured premises. abnormal condition arising from the perils insured against. However,
the mere fact that fire destroyed the thing insured when there is war
does not automatically prevent recovery.
CONCEPT There can still be recovery is loss was occasioned by a cause
commotion, or to the abnormal condition arising therefrom. Recovery
is permitted if the fire ‘was purely an ordinary and accidental one.’
PROPERTY
WARRANTY independent of, and unrelated to war, invasion, civil
INSURED
WAR AND RELATED
RISK

An alteration in the use or condition of a thing An alteration in the use or condition of a

thing insured from that to which it is
REQUISITES
insured from that to which it is limited by the
policy, which does not increase the risk, does limited by the policy made without the Even in the absence of stipulation, the insurer may
ALTERATION EXCEPTIONS refuse to pay if the loss was the result of intentional act
not affect a contract of fire insurance. There is consent of the insurer, by means within
an increase in the hazard or risk if there is a the control of the insured, and increasing INTENTIONAL of the insured.
substantial change of conditions affecting the the risks, entitles an insurer to rescind a ACT However, the fact that the loss was the result of the
risk as materially to increase it. contract of fire insurance. intentional act of the insured must be established by
However, mere negligence temporarily FIRE
INSURANCE sufficient evidence.
endangering the property does not violate the The value of the property
law.
payable (and the amount
SUBSEQUENT
SOUND VALUE SOUND VALUE payable by the insurer) is
DISTINQUISED
A contract of fire insurance is not ACTS OF THE FROM computed by deducting the
affected by any act of the insured INSURED REPLACEMENT depreciation from the
COST VALUE
subsequent to the execution of the REPLACEMENT replacement cost. The
The valuation fixed in the policy shall be policy, which does not violate its COST VALUE The amount payable will be higher depreciation is determined on
provisions, even though it increases the because the depreciation will not be the basis of the useful life of
binding on the parties.
risk and is the cause of the loss. deducted. The valuation may also on the property to establish the
Exc. If there is fraud on the part of the insured
the basiis of Fixed Value which is a remaining life thereof. Not the
when the valuation was fixed. This entitles the MEASURE OF
CO-INSURANCE fixed pre-determined valuation. same as Book Value.
insurer to rescind. INDEMNITY
Effect is the same as in the policy of marine A co-insurance clause is
insurance. PROHIBITIONS always part of marine
VALUED
insurance without the
POLICY need for stipulation.
However, in a fire Meaning
insurance, express The insured shall be paid only on proportion that the
No policy of fire insurance shall be stipulation is required in
OPEN amount of insurance purchased bears to the minimum
pledged, hypothecated, or the policy for a
INDIRECT amount of insurance that the contract requires the
POLICY transferred to any person, firm or co-insurance clause to be insured to carry.
LOSSES company who acts as agent for or effected
otherwise represents the issuing It is the apportionment of losses between an insurer and
There is no valuation in the policy. The company, and any such pledge, its insured such that the insurer will pay a fraction of each
measure of indemnity in an insurance hypothecation, or transfer hereafter loss equal to the con-insurance apportionment ratio.
against fire is the expense it would be to made shall be void and of no effect
the insured at the time of the The indirect or consequential insofar as it may affect other
Financial loss due to the creditors of the insured.
commencement of the fire to replace the losses arising out of the loss
direct physical damage of of use of the property
thing lost or injured in the condition in physical property;
which at the time of the injury The fire insurance policy cannot be
transferred without the consent of the
insurer. Even if the alienation is allowed
3. Rent Insurance in the insurance policy, it is also
This protects the
required that the transferee has
Business Interruption Insurance Extra Expense Insurance insured from loss of
insurable interest over the property
This insurance may provide that the This insurance covers extraordinary rental income. The
reninsurance protects
insured.
insurer is liable for the loss suffered expenses that be incurred in an effort to
consisting of loss of earnings comprising avoid any interruption of service. It the insured against
of the net profits that could have been covers additional expenses over and either loss of income In a chattel mortgage, there is no
realized had the business continued and above the normal cost of doing business from property or loss alienation by the mortgage of the
expenses that continue despite the if necessitated by a fire or other insured of use of the property. property until foreclosure.
interruption of the business. peril at the described premises.